Americas ETP News
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DB Markets Research-North America Synthetic Equity & Index Strategy-US ETF Compass-Inflows to Equity ETPs Led in September
October 24, 2017--DM equities rallied, while EM equities and fixed income lagged in September
Asset returns were mostly positive for Equities and slightly negative for Fixed
Income and Commodities. Global equities were up by 1.88% during last month,
mainly driven by US and Intl DM equities with returns of 2.44% and 2.36%,
respectively; meanwhile, EM equities registered a weak performance (-0.04%).
DM equities rallied, while EM equities and fixed income lagged in September
Asset returns were mostly positive for Equities and slightly negative for Fixed
Income and Commodities. Global equities were up by 1.88% during last month,
mainly driven by US and Intl DM equities with returns of 2.44% and 2.36%,
respectively; meanwhile, EM equities registered a weak performance (-0.04%).
Fixed income (-0.57%) was mostly negative; however, HY Corporates (+0.60%)
and Senior Loans (+0.39%), and Corp. Floater (+0.23%) were the best performers
posting gains; while, Intl DM Debt (-1.87%) and US Treasury (-0.88%) exposures
were among the weak areas during September. Commodities registered gains of
1.99%, driven by Energy (+4.56%) and Agriculture (+1.82%).
US ETP assets rise 2.5% driven by inflows of $36bn in September
September inflows were led by Equity, followed by Fixed Income and Commodity
ETPs, with the remaining asset classes receiving mixed weak flows. ETPs
registered $36.0bn in new cash, helping assets rise by 2.5% from one month
earlier, reaching a total of $3.15 trillion at the end of September. Equity, Fixed
Income and Commodity ETPs attracted inflows of $22.7bn, $11.3bn, and $2.0bn,
respectively.
Management fees continue to drop as issuers compete for market share
Competition continues to drive ETF management fees lower as issuers compete
for market share. Within equity ETFs, this has been particularly true for
international exposures where the premium issuers can charge for market access
is eroding. For US-only exposure, investors have been willing to pay a premium
in 2017 for exposure to alternative benchmarks (eg. QQQ) and industry-focused
products. ETF providers announce more fee cuts, and consolidation across the
industry continues.
How Active Is Passive?... Less so now for US Equity ETFs
Despite significant growth in smart beta and sector ETFs, aggregate AUM
allocated by these products to S&P 500 stocks has become less active. We use the
concept of "active share" to measure the percentage of the portfolio that deviates
from the benchmark. For S&P 500 stocks, the active share of the ETF portfolio
dropped from 9.5% post-Brexit to 7.8% at the end of September, suggesting that
inflows to benchmark-tracking dominated. The last time active share of the ETF
portfolio was this low was at the equity market low in 2009.
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Source: Deutsche Bank Markets Research-North America-United States-Synthetic Equity & Index Strategy
Record flows for exchange traded funds that track bond markets
October 24, 2017--Fixed-income funds boom led by BlackRock's investment grade corporate bond vehicle.
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Source: FT.com
K&L Gates-FINRA Capital Acquisition Brokers Now Subject to Pay-to-Play Rules
October 24, 2017-- The pay-to-play rules have expanded to FINRA capital acquisition brokers ("CABs") and the investment advisers who use CABs to solicit governmental entities, which include public pension funds, for investment advisory services.
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Source: K&L Gates
ROBO Global Robotics & Automation ETF (ROBO) Celebrates 4 Years on Nasdaq with $1.5 Billion under Management
October 24, 2017--The First Robotics Fund Marches Into Fifth Year
The ROBO Global Robotics & Automation ETF (Nasdaq: ROBO) is heading into its fifth year of trading with the wind at its back, having attracted over $1.5 billion in assets since inception on Oct. 22, 2013.
Year-to-date, it's delivered a total return of 37.73 percent.
Comprised of 85 securities that span 14 countries, the fund invests in the robotics, automation and artificial intelligence (RAAI) sector, as defined by the ROBO Global Robotics & Automation Index. A team of financial and robotics experts, including five Ph.D.s, constructed the Index that the ROBO ETF tracks.
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Source: ROBO Global
Principal launches ETFs applying value, momentum strategies
October 23, 2017--Principal has brought to Nasdaq exchange-traded funds that base their investments on value and momentum strategies.
The Principal Contrarian Value Index ETF is designed to replicate the performance of the Nasdaq US Contrarian Value Index, while the Principal Sustainable Momentum Index ETF seeks to deliver the performance of the Nasdaq US Sustainable Momentum Index.
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Source: smartbrief.com
AdvisorShares Weekly Market Review-Dow 23,000 Hats For Everyone!
October 23, 2017--Highlights of the Week Ending 10/20/2017
Macro
Domestic equity markets inched higher last week other than the Dow Jones Industrial Average which moved up 1.99% taking a new big figure in the process, closing at an all time high on Friday. The S&P 500 gained 0.85%, the NASDAQ was up 0.34% while the Russell 2000 added 0.41%.
The outperformance of the Dow can be attributed to a well received, even if for just meeting expectations and not guiding lower, earnings report from Big Blue. The Dow being price weighted of course means an especially good or bad showing for a stock with a three digit price will likely cause the type of divergence we saw last week.
Don't look now but progress may have been made last week toward the much awaited tax reform.
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Source: AdvisorShares
BNY Mellon Appoints Outsourcing Veteran Teresa Messina as Head of Middle Office Solutions
October 23, 2017--BNY Mellon has appointed Teresa Messina as Head of Middle Office Solutions (MOS). Messina will manage BNY Mellon's Middle Office offerings across its Asset Servicing and Alternative Investment Services businesses. She will be based in New York.
Middle Office Solutions provides mission-critical administration services to investment clients by delivering on their non-core operations and technology needs. Using these solutions, clients can focus on efficient investment management and servicing their own clients with higher performance and satisfaction.
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Source: BNY Mellon
IndexIQ Reduces Fees For IQ Hedge Multi-Strategy Tracker ETF (QAI)
October 23, 2017--First-of-its-kind ETF brought liquid alternatives to the mainstream
IndexIQ is waiving a portion of the management fee for its $1 billion IQ Hedge Multi-Strategy Tracker ETF (NYSE Arca: QAI) to reduce the fee by 29% to 53 basis points, a 22-basis point reduction.[1]
Including acquired fund fees, the total expense ratio for QAI after the fee waiver will now be 76 basis points. This change is effective November 1, 2017.
QAI, which launched in 2009 as the first hedge fund replication ETF, is the largest ETF in the multi-alternative category by asset size.
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Source: IndexIQ
CBO-Measuring the Adequacy of Retirement Income: A Primer
October 20, 2017--Over the next 30 years, the share of the U.S. population age 65 and older will increase from about 15 percent to almost 22 percent, spurring growing interest in understanding whether people will have adequate income in retirement
As reflected in an extensive body of literature on the topic, researchers have developed diverse approaches for quantifying the adequacy of retirement income, focusing on different groups of retirees and employing different definitions of income and adequacy. For example, some researchers have computed the fraction of current retired workers whose income is below the poverty threshold and found it to be less than one-tenth of retirees. In contrast, others who have examined how income changes upon retirement project that a much larger fraction of current workers would experience a substantial decline in income as they retire.
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Source: Congressional Budget Office (CBO)
KraneShares Expands Its Internet Suite with the Launch of Emerging Markets Consumer Technology ETF (NYSE: KEMQ)
October 20, 2017--Krane Funds Advisors, LLC, ("KraneShares") a U.S. asset management firm known for its China focused KraneShares exchange traded funds (ETFs) and innovative China investment strategies, announced the launch of the KraneShares Emerging Markets Consumer Technology ETF (Ticker: KEMQ) listed on the New York Stock Exchange.
KEMQ holds emerging market companies focused on internet software/services, payment processing, and E-Commerce.
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Source: Krane Funds Advisors, LLC
